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Greek banks' ELA ceiling declines further

The European Central Bank lowered the cap on emergency liquidity assistance (ELA) Greek banks draw from the domestic central bank by 0.9 billion euros to 51.9 billion euros, the Bank of Greece said on Thursday.

The move reflected improving liquidity conditions in Greek banks and the stabilization of private sector deposit flows, it said.

The ELA ceiling is valid up to October 4.

Greek banks have relied on emergency liquidity assistance since February 2015 after being cut off from the ECB’s funding window.

Emergency funding is more costly than borrowing directly from the ECB.

In June the ECB reinstated Greek banks’ access to its cheap funding operations, allowing lenders to reduce their dependence on the emergency liquidity lifeline.